In the nonprofit sector, 80% of individual donation revenue is estimated to come from the top 20% of donors. For some organizations, this ratio is closer to 90/10. No matter where your nonprofit falls within this range, one thing is clear: Strategically securing major gifts is critical for ensuring you have the necessary resources to fund your mission!
Conducting thorough prospect research—i.e., gathering data on potential donors to assess their financial capacity and willingness to give to your nonprofit—allows you to unlock donor connections that lead to major gifts.
To help you get started with prospect research, we’ll walk through the following four tips for identifying potential major donors:
- Set Major Giving Goals to Guide Your Research
- Leverage the Right Prospect Research Tools
- Consider More Factors Than Just Prospects’ Wealth
- Build Relationships With Potential Donors
Every organization’s prospect research process looks different depending on its size, needs, and resources. However, these strategies are a good starting point for any nonprofit looking to expand its major gift program and learn more about its donors.
1. Set Major Giving Goals to Guide Your Research
Just as your organization sets fundraising goals to guide other giving campaigns or events, you should also develop objectives for your major giving program to direct your fundraising and development teams’ efforts.
First, your nonprofit should determine a threshold for major giving. As DonorSearch’s major donor fundraising guide explains, “Who your major donors are and what [gift] amount is considered ‘significant’ will look different depending on the size and scope of your organization.” Take the average of the largest 10-20% of gifts your nonprofit received in the past year to set your initial threshold, but keep in mind that you’ll likely need to adjust this number as your organization grows.
Then, brainstorm a list of current and upcoming initiatives that your nonprofit could use major gifts to fund, such as capital campaigns, new program launches, or service delivery expansions. Creating gift range charts can help you determine how many major gifts you need for each initiative and what amounts to ask for.
By taking these steps, your organization can set specific goals for the number of prospects to identify through your research, the projected giving ranges you’re looking for, and your potential donors’ propensity to contribute to certain initiatives.
2. Leverage the Right Prospect Research Tools
In addition to clear goals, effective prospect research begins with robust software. Make sure your organization has access to the following tools before you start:
- A constituent relationship management (CRM) system. The first place you should look for potential major donors is among your current supporter base. Analyze your stored donor data to identify loyal, passionate supporters who have the financial capacity to upgrade their contributions to meet your major giving threshold.
- A matching gift platform. According to Double the Donation’s matching gift software guide, these tools help spread awareness about employer matching gift opportunities and guide donors through the match request process to maximize your nonprofit’s donation revenue. For potential major donors, these tools can provide insight into their giving capacity by highlighting their professional connections.
- A prospect research database. These third-party solutions give your nonprofit access to a wide range of wealth and philanthropic information about potential donors. Look for a database that draws from multiple datasets and is updated regularly so you can always find the most comprehensive and current information on your nonprofit’s prospects.
Additionally, don’t underestimate the power of Google searches and social media deep dives on your prospects! These easily accessible online resources can provide additional details about each prospect’s background, interests, and values to help you tailor your outreach to them.
3. Consider More Factors Than Just Prospects’ Wealth
Although it’s important for a prospect to be financially capable of making a large gift to your nonprofit, remember that just because they can doesn’t mean they’ll want to become a major donor. To account for this, take a holistic approach to prospect research by looking for three main types of indicators when identifying potential donors:
- Capacity markers, which demonstrate a prospect’s financial ability to make significant contributions, include factors like real estate ownership, SEC transactions (stock holdings, investments, etc.), business affiliations, and political giving history.
- Philanthropic markers show that a prospect has charitable tendencies. The two biggest indicators of this are previous donations to your organization and gifts to other nonprofits.
- Inclination markers help you gauge a prospect’s willingness to give to your specific organization. They include a deep love for your cause; a history of nonprofit involvement through event attendance, volunteering, board service, or other engagement methods; and personal information such as interests, values, and family ties.
When all three types of indicators are present, you’ve found a viable major donor prospect for your organization!
During this process, don’t discount prospects who are already involved with other nonprofits. Many philanthropically-minded individuals—especially those with high giving capacities—are willing to support multiple organizations to make the greatest possible impact on causes they care about.
4. Build Relationships With Potential Donors
While donor data is a key tool for soliciting major gifts, it only goes so far. You also have to get to know your prospects personally to make them feel valued and connected to your nonprofit—only then will they be willing to make a significant contribution.
Here are a few tips for building relationships with major donor prospects:
- Meet with them one-on-one. Ideally, a member of your major gifts team will connect with the prospect in person, although a video conference can also work if necessary. During this meeting, the team member will provide an overview of your organization and its current initiatives. They’ll also give the prospect time to talk about themselves, noting important details about their lives, backgrounds, and interests.
- Establish regular communication cadences. After the initial meeting, follow up with the prospect using their preferred contact method (phone call, text, email, etc.) and frequency. Share additional information and updates on the projects or programs they expressed interest in, and introduce them to other staff or board members who are working on those initiatives or have other connections with the prospect.
- Offer additional engagement opportunities. It’s often helpful to make several smaller requests of a prospect in the lead-up to your main donation ask to ease them into getting involved with your organization. Invite them to volunteer, attend a fundraising event, or consult on a project that aligns with their professional background so they can see your mission in action and be even more inspired to give.
As you get to know each prospect, add new information about them to their profile in your CRM. Additionally, continue leveraging your prospect research tools to fill in any information gaps so you can make an informed, compelling major gift solicitation when the time is right.
With the right objectives, software, and approach, your nonprofit can make the most of its prospect research efforts and identify potential major donors. Then, use what you’ve learned to build relationships with prospects that not only lead to one major gift but set them up to become long-term supporters of your mission.